Mr. Chair, thank you for the invitation to appear today. I am Tim Johnston, manager of North Central Community Futures Development Corporation Inc. I am joined today by our chairperson, Frances McIvor, an entrepreneur from Wabowden, Manitoba, and a member of the Peguis First Nation; and Chief Marcel Moody of Nisichawayasihk Cree Nation in Nelson House, who chairs our business development committee. We are grateful for the opportunity to share our comments regarding access to capital.
CFNCD was formed in 1997, with the assistance of Western Economic Diversification Canada, as a regional, community-based economic development agency. Our region covers the north central portion of Manitoba and extends from Norway House in the south to Churchill in the north. The population is approximately 35,000, and is comprised of seven first nations, seven northern affairs, and three urban industrial communities. Some unique aspects include that all five of the northern first nations that are signatories to the current Manitoba hydro development projects, as well as the Canadian city with the highest percentage of first nations residents, are within the region and members of CFNCD.
CFNCD is an aboriginal financial institution and a member of the National Aboriginal Capital Corporations Association.
CFNCD programs include business development through the provision of business loans and consultative services and support, and community development by providing support and assistance for initiatives that enhance quality of life and viability of communities. The CFNCD board is of the position that neither of these two functions can achieve success without the other. As noted in “Sharing Canada's Prosperity—A Hand Up, Not a Handout”, the final report of the Standing Senate Committee on Aboriginal Peoples in 2007:
Successful economic development depends on a community's capacity to manage and develop those resources to its economic benefit. Without this capacity, the economic value of lands and resources will be limited.
However, for today's presentation, CFNCD will focus on business development and the challenges, barriers, and opportunities relating to access to capital for first nation entrepreneurs and communities in our region.
Since inception in 1997 to March 31, 2014, CFNCD has advanced a total of $6,625,221 in loan funds designed to assist entrepreneurs for start-up, purchase, or expansion of a business. CFNCD was capitalized in 1997 with $900,000, and received $100,000 in 1998 based on demonstrated need, but has not since received any additional capitalization. The total bad debt is $576,000, of which a total of $120,000 has been recovered, meaning a loan loss rate of 8.7%, with a recovery rate of 20.9%, for a total loan loss of 6.9%. As a developmental lender, the CFNCD board is proud of this achievement.
Over the last two fiscal years, from April 1, 2012, to March 31, 2014, CFNCD has advanced 13 loans to new businesses, for a total of $404,000; advanced 14 loans to existing businesses, for a total of $633,000; rewritten four loans at a value of $122,000; leveraged $900,557; and created a total of 58 full-time and 39 part-time jobs.
The question is, how can a loan fund of $1 million achieve these results? The answer is it cannot. CFNCD has accessed additional capital in the amount of $1,075,000 by way of five loans from other sources: four from the Community Futures Investment Funds in Manitoba, and the initial loan from another AFI, Northwest Manitoba Community Futures Development Corporation in Lynn Lake.
The ability to access additional capital has been critical, but it also creates challenges. The cost of borrowing must be factored into the lending rate. Also, as the funds are borrowed, the tendency is to become more stringent in lending funds, and loans become strategic. This eliminates some borrowers from accessing capital. These challenges should not necessarily be viewed as negative, but they do impact the availability and the cost of capital for entrepreneurs.
CFNCD served as an external delivery office for aboriginal business programming from September 1998 until March 31, 2013, with Industry Canada, Indian and Northern Affairs Canada, and Aboriginal Affairs and Northern Development Canada. CFNCD then delivered programming for the First Peoples Economic Growth Fund and Louis Riel Capital Corporation until March 31, when funding constraints resulted in termination.
Unfortunately, the devolution of the program over the years reduced the CFNCD role, and our organization no longer provides this service. CFNCD was one of the most successful XDO offices in Canada because the office was located in our region, in northern Manitoba, with a full-time staff person available to assist first nation communities and entrepreneurs. As a result, significant strategic investments occurred at a local level in major infrastructure and resource sector projects.
For example, NCN, in 2005, with a contribution of $500,000, expanded the Mystery Lake Motor Hotel property in Thompson, at a total project cost of $2.8 million. This was a strategic investment, as the property is currently before the federal government as an addition to reserve. This will enable the first nation to generate revenues for reinvestment.
Another example is a $500,000 contribution received by Nisichawaysihk Construction Limited Partnership, in 2009, for construction equipment totalling $5.8 million relating to the Wuskwatim hydro project. Unfortunately, devolution has resulted in a number of changes, including reducing the contribution formulas, as well as the delivery of the program out of Winnipeg, which is approximately 750 kilometres from Thompson. This has a detrimental impact in reducing access to capital due to a lack of program visibility and presence in the region. As a result, the developmental lending role and capacity building is diminished.
The ability to build and foster long-term relationships with first nation, aboriginal, and non-aboriginal communities, as well as industry, is critical, and an opportunity to address access to capital barriers. The CFNCD board has an objective to create wealth in our region by encouraging a shift in our economy, from being based largely on social transfers to the creation of wealth. This requires participation by all stakeholders. The federal government needs to consider legislative, as well as department, program, and policy changes.
Enabling first nations to create and retain wealth for capital investment is critical. Industry and the resource sector need to increase participation and opportunities for first nations investment in major projects and developments. This will require a significant period of time, and a strategy that combines capacity building as well as creative and increased levels of support.
Improved relationships amongst stakeholders is critical. Our region has proven that strong relationships with real action can make a difference. The creation of an aboriginal accord between our largest urban centre and stakeholders in the region was a beginning. I have brought copies of the report. I apologize that it's only printed in English, but I can leave them for your information, if desired.
Since signing the aboriginal accord in 2009, the Thompson Economic Diversification Working Group has recognized that economic development in our region is dependent on partnerships with communities, aboriginal interests, and industry. Work has begun to create a northern Manitoba economic accord, with a goal of creating a set of shared values, beliefs, and principles among first nation and aboriginal communities, industry, environmental conservation, and other government and non-government agencies.
ln conclusion, some consideration of the following would be beneficial to improve access to capital.
Additional capital is required by many AFIs, including CFNCD, to meet the demonstrated need, but it should be based on performance. Additional loan capital must be available to all AFIs. Aboriginally controlled Community Futures AFIs like ours have not always felt that we are equal or full partners at the NACCA or federal government table.
An interest rate buy-down program is necessary and must bridge the gap between borrowing and lending costs. Any devolution of programs must consider the impact on the entrepreneur and communities served. If centralization is to occur, plans must be in place to ensure program accessibility, presence, and visibility. This could be accomplished by way of subcontracts with agencies such as ours.
The federal government must coordinate departmental policies and programs to maximize benefits to first nations. NCN and the City of Thompson reached a municipal services agreement in 2005, amended in 2010, and yet both parties eagerly await designation by the federal government. At a time when access to capital is an issue, the last thing that the federal government should be doing is standing in the way of first nations creating their own wealth.
ln preparing for this presentation, Mayor Dennis Fenske of the City of Thompson and NCN Chief Marcel Moody both requested that I to encourage the government to move this process forward. Program contributions and funding should focus on creating opportunities for first nation communities to participate in unique and timely economic projects in their territories. In our territory, it's hydro development. This was raised in the previously referenced report, which said:
ln addition, because financing options are often limited, communities find themselves unable to invest in infrastructure improvements or participate in large scale resource development projects.
Finally, a need exist to encourage and foster better relationships between first nation communities, industry, and non-first nation communities in order to maximize economic opportunities for first nations.
Our corporation thanks you for the opportunity and would welcome any questions.
Thank you, Mr. Chairman.
Mr. Richards, members of Parliament, Chief Moody, and speakers, thank you for giving me the opportunity to talk about access to capital and some solutions that we have developed over time.
If you don't mind, I will continue in French in order to be more efficient, given the time that's in front of me.
I would like to talk to you about the problem of First Nations’ lack of access to capital. My colleagues here today, members of the National Aboriginal Capital Corporation Association (NACCA), have explained this problem very well. My organization has also been a member of NACCA since 1992.
First among the factors at play in the problem of First Nations’ lack of access to capital is section 89 of the Indian Act, which stipulates that the property of an Indian on a reserve is not subject to seizure. Another factor is that communities are located a very long way from the large financial centres. Aboriginal communities are also clearly characterized by cultural differences. A traditional banker, who is not fully aware of an environment, will generally be hesitant to provide financing.
Aboriginal people generally have difficulty in securing access to capital. Aboriginal entrepreneurs are not immune from this reality. That is why, in 1995, the federal government, in conjunction with First Nations, launched the Canadian Aboriginal Economic Development Strategy by injecting $345 million into First Nations. That sum included $200 million to create SOCCA, the native commercial credit corporation. I am the President and General Manager of SOCCA, which was established in 1992 with an initial capitalization of $5 million, plus an additional $3 million that came from the federal government, for a total capitalization of $8 million.
From 1992 to today, we have provided $60 million in loans. We have invested in more than 500 business projects, for a total of 650 business loans. The capital of $8 million is now $11 million. Our capital has borne fruit. For SOCCA, I feel that the best is yet to come.
Another of SOCCA’s accomplishments is that we have opened the door to establishing partnerships. We have been working for a number of years with the Mouvement Desjardins in Quebec and with the Royal Bank of Canada. We see SOCCA as a kind of pioneer. It has opened doors and introduced the aboriginal market to major financial institutions. Over time, we have seen that large banks and credit unions, once reluctant to provide financing to aboriginal communities, have become more and more involved, having recognized that good business opportunities exist there.
SOCCA has been involved in education and development. By so doing, it has prepared the market, in a way. At the beginning, we financed small companies and those companies, with a positive experience of credit, quietly moved to large financial institutions. In 2005, in the course of its activities, SOCCA noticed that communities had other kinds of needs, specifically in housing, which was a very serious problem.
I will not go through all the details with you, but you know that aboriginal communities all across Canada have a housing backlog that runs into billions of dollars. Solutions must be found. In 2005, SOCCA started another organization, the Aboriginal Savings Corporation of Canada. To begin with, it was a pilot project. The corporation had no capital and relied on SOCCA’s financial capabilities.
The pilot project consisted in testing the market and issuing $1 million in bonds for sale to First Nations’ members who had a taste for saving. The first bond issue was around $1 million, but our objective was actually more modest.
We told ourselves that, if we sold $500,000 worth, it would be a success. The day before the bonds were issued, we had already reached the million. After the pilot project, we continued issuing bonds. Since 2005, we have had 18 bond issues with a total capital of $22.3 million. Basically, the bonds have all been sold to the members of eight different First Nations.
In 2012, we also opened the market to large institutions. Three bought Aboriginal Savings Corporation of Canada bonds, including the Native Benefits Plan, the aboriginal pension fund in Quebec, which today is a half-billion-dollar fund.
To whom do we make loans? Basically, the money assembled from the bond issues is lent out for the communities’ housing needs. To date, we have 57 borrowers and we have made loans totalling $24 million. The market we are targeting first and foremost is made up of solvent individuals who wish to own their own homes. We also work with First Nations band councils that have their own housing funds. When the funds need capital, they can come to us for a loan. We also make loans for community housing projects.
The loans we make come with training programs tailored to the reality of the communities we serve, depending on their level of advancement.
One of the objectives for ourselves and for the Aboriginal Savings Corporation of Canada is to change the way in which things are done, to change mindsets, and to move from a system of dependence in a community to a system based on responsibility.
Dependence in a community is when tenants see their housing as first and foremost an obligation that the band council has to them. Housing is too often seen as their due, not as an opportunity for a future investment in their heritage.
Tenants basically depend on the band councils. In turn, band councils depend on governments for ministerial guarantees and financial contributions. We have to acknowledge that, in the current climate of austerity—a very popular word in Quebec at the moment—money is not always on the table and not always available.
The lenders collect all the profits and take almost no risk. They make the loans, they make money and they are backed by ministerial guarantees. The big losers, in fact, are band councils, who pay the bills knowing that a ministerial guarantee ultimately means that their operating budgets are going to be reduced.
That system has to be changed and everyone involved must be given responsibility. That includes the lenders, who clearly are going to want to continue making a profit and getting some performance from their capital. However, we need to educate them so that borrowers take risks—borrowers and band councils—but also First Nations members with a home or housing of some kind. They also have to assume some responsibility.
Rather than to have them as tenants, our objective is to make them homeowners. When you own your home, you are inclined to take care of it. You are inclined to maintain it because it may become one of the major assets in your legacy, and when you retire.
However, we must not be under any illusions. Moving from a system of dependence to a system of responsibility is not going to happen overnight. It will take time.
We need pilot projects, pioneers and organizations with development as their mission that are going to quietly create a housing market in the communities. That is much like we did with the entrepreneurs with the Native Commercial Credit Corporation and it is what we intend to do with the Aboriginal Savings Corporation of Canada. The change will be gradual. We will have to be patient, but we are also going to need the commitment and support of the government to allow the changes to happen.
Rather than opting for a system of ministerial guarantees, the government should consider the possibility of providing the means to make the investment products offered to investors and those with money work. What must be guaranteed, then, are the sources of capital rather than the loans. The management of the risk and the loans must be left in the hands of the organizations that know the market well and who specialize in it.
We've been involved in a lot of major economic development projects in our community. We're involved with a hydro partnership, obviously, with Manitoba Hydro. We own a third of a $1.6 billion project and we had to provide $20 million of our own money to be a partner in the hydro development project in our community.
We also have a grocery store in Thompson, a grocery store we just opened about a year and a half ago. We have our Mystery Lake property, which is located right in Thompson. That's a property that I think can work in Thompson. We're also building a new store in our own community to replace the Northern store that was previously in our community.
The restriction on our ability to access capital as a result of the property not being converted has been so frustrating. We've tried everything within our power to convert this property. Even with the TLE lands that have a legal obligation to convert the property or lands into reserve, that's been really cumbersome and slow as well.
So in terms of recommendations, I don't know how to make it quicker. I think the regions have to be more responsive. There are templates that are changing over time. We don't even get the information on what the policies are and the changes in them. People in the region don't understand what's happening in the headquarters, so there's a disconnect between headquarters and the regions.
Based on my experience, I don't know all the details of what's happened. Even the people in the region don't understand what the changes are when they happen, so they have to wait on what headquarters has to say. There's really a lack of communication sometimes between the department and our first nation. For example, when we make phone calls to the region, they don't answer. They don't get back to us. So we have to redo everything, like the environmental studies that have to be redone every two years.
It seems that we spin our wheels and we go back and do the same thing over and over again. That is really frustrating to me, and for us, and we've been really patient. Our philosophy has always been that we have to look after ourselves as a community, that we need to be economically independent, that we need to be economically strong. We know that government's not going to provide the funding we need. As of today, we need $60 million in new infrastructure dollars to rebuild our nation. We spent $20 million of our own money as equity we need for Wuskwatim.
It really impacts the development of our community, but we know that in order for us to rebuild our community, we have to invest economically, and it's so frustrating, especially for other first nations. In Manitoba 75% of our first nations are under some sort of third-party management or remediation and it's really hard for them to access capital from conventional banks. Even when we borrow money from banks to pursue an economic development project, the government has to guarantee those loans, and if something does happen with the minimal amount of money we do have, it can bankrupt our nation.
But, luckily, we were able to do it ourselves. There are other smaller first nations that don't have that capacity and that need to access capital so they can start participating in the mainstream economy. There are only so many gas stations that you can build on their reserves. They need to participate in our economy and resource development. That's really important.
As far as recommendations as to how to speed up that process are concerned, I think the government has to have the will to make those happen, because we're not going to be able to provide all the funding that we need for first nations. Even our first nation, for example, needs $60 million today. We need a new school, we need new water treatment plants, and we need to rebuild our houses. We're short 400 houses in our community and our philosophy has always been, yes, we need to invest economically so we can rebuild our own community.
We've been waiting for a hundred years to get the proper funding that we need from the government. It's not there, but we're doing it ourselves. For me, I think it's the right way, but we need access to capital and that's the bottom line.
Thank you for the question.
We take our inspiration from the Huron-Wendat First Nation in Wendake, located close to Quebec City. That model inspires us because, in the 1970s, the community of Wendake was quite poor and the houses were small. People took two and three years to build their houses, for as long as they received government grants. The community of Wendake was no different than most of the other communities in Canada.
In the 1970s, the elected council at the time decided to create a housing fund and to lend money to individuals rather than giving them government grants piecemeal. Today, that fund is valued at $30 million. I can tell you that the houses in Wendake are comparable to those in the municipalities that border the community.
I spoke about breaking the cycle of dependence and instead bringing a community into a situation of responsibility. That is exactly what has happened in Wendake over a period of about 40 years. As the housing fund grew, the community was able to make bigger and bigger loans, which allowed people to have more access to capital and therefore to build more comfortable homes that better met their needs. Instead of being all the same, the houses have features that reflect people's own tastes.
Gradually, people became homeowners. Because of that, they have continued to maintain their property, with the result that, today, the community of Wendake is beautiful, with beautiful houses that most of the people own. When they retire, they will have a significant asset at their disposal.
The community of Wendake also worked with financial institutions. First, it was with the credit union in Wendake, then with the Native Commercial Credit Corporation, which is an aboriginal finance company just like the Community Futures North Central Development, represented by other witnesses at this committee. Since 2005, the housing fund has been working in coordination with the Aboriginal Savings Corporation of Canada.
We use the Wendake model as our inspiration and we are reproducing it in other communities that are prepared to make the transition from dependence to more responsibility. At the outset, we want to work with model individuals, those who are solvent and who have good jobs. We feel that, little by little, those individuals will become examples in their communities and will encourage others there to emulate them and achieve the same turnaround.
Good morning, Mr. Vincent.
As I mentioned in our previous discussion, I looked at your biography, which dates from 2009. It says that your organization provides financing under commercial conditions to start or expand businesses that are under majority aboriginal control. I imagine that is still the case today.
I studied commercial law in law school. So I can decipher and read a share-capital document. But it does require some special training, which is why most of my constituents are not able to look at the breakdown for any given company.
In my constituency, one of the key aspects of my mandate for the past four years has been the requirement to deal with white-collar crime. We have to call it for what it is. Because of the Plan Nord and the economic boom, a number of companies have been started in my riding in the last four years. The truth is that they are fraudulent; they are shell companies. They use aboriginal people for tax purposes, for income tax. You are aware of the specific rules that apply to an entity that claims aboriginal status.
Some turnkey companies have appeared in the Manicouagan region. They work mostly in natural resource extraction and construction. I am thinking about the La Romaine project, for example. A number of corporate entities popped up overnight. You just have to glance at their share-capital to realize that the leadership, the steering wheel, is not really in the hands of First Nations communities or individuals.
Another situation was brought to my attention by the economic development officers in Manicouagan. In their view, First Nations' participation is often limited to being given tokens—I am not familiar with the concept—that allows them to attend board of directors meetings and even Montreal Canadiens' games, if you can imagine. That is where their participation ends. When these shell companies no longer need their token Indians, if you will excuse the expression, they simply cast them aside. Then it's game over for the company that claimed to be aboriginal when it started.
Mr. Vincent, what protections does your organization have in place in order to keep that kind of embezzlement, those kinds of shell companies, out of your activities?
Thank you, Mr. Genest-Jourdain.
In terms of commercial loans, we have been working with the Native Commercial Credit Corporation, which has been in existence since 1992. We have issued more than $60 million in loans so far. But our loss rate on the loans is less than 1%. We have a competent team as well as investment and credit policies. That said, from the outset, we screen entrepreneurs for their capability, their reputation and their competence. Whether they are fully aboriginal or have some association with non-aboriginals, it doesn't matter. We still conduct quite a major screening.
As for the problem you mentioned, criminality, we unfortunately have those whom we might as well call crooks. In my opinion, they are taking advantage of the poverty and ignorance among aboriginal people. Generally, as we know, training is a problem among First Nations and, unfortunately, even some of the leaders do not have your competence and expertise, Mr. Genest-Jourdain. If they did, they might understand how deals are organized, how to read financial and share-capital documents to see, in these cases, who the shareholders are and how the system works, with voting shares and non-voting shares and so on.
The crooks sniff out the ignorance and poverty in some communities. They then get the leaders in their pockets, they wine and dine them, fly them around in jets or helicopters, invite them to hockey games, and so on. Unfortunately, only a few leaders in a community get those perks while the whole community is suffering. That leads to situations like the one you describe.
In my opinion, the solution would be to invest more in training leaders. Clearly, we also need to be able to encourage economic development in First Nations communities, to get them out of poverty, to stimulate their economy and to create jobs. It is clear to me that that would largely solve the kinds of problems you are describing.
You were talking about the construction companies in your region, but I can tell you that other initiatives, like Wendake Construction, are working very well. The company has ties to Hamel Construction, a construction company with an exemplary reputation, a company that passes all the Autorité des marchés financiers' tests.
Before it firmed up those ties, Wendake Construction analyzed its partner thoroughly. It made sure that the company was built on solid foundations. It also made sure that training would be provided to Wendake members so that they would not be token Indians, but would genuinely play a role in the management of the company
To answer the question that was asked about the FNFA, we don't belong to that organization, but we are certainly looking at that to access more capital for our community.
As far as the education issue in our community is concerned, right now, unfortunately.... Over the weekend, our kids were trying to burn down our school. I am not quite sure how we are going to deal with that. It's unfortunate, but that is sometimes the reality. People are not doing anything, so they look at other things to accommodate their time.
In terms of education for our people, for our community, we need a brand new school. Our school is about 30 years old. It is totally non-functional as a school. We had to build a temporary high school using our own funds from our own community because there was a need for a high school in the community. Education-wise, there are more dollars that we need in our community to properly educate our children.
We have a funding shortfall. We get $5,600 per child, I think. Other school divisions in Manitoba get about $12,000 per child. There is a disparity there. We need to educate our children.
Even when we had our Wuskwatim project, we had over $12 million to upgrade our people so they could qualify for jobs at Wuskwatim. The majority of that money was spent upgrading our youth, our people who need to get those jobs at Wuskwatim. Throughout that process, our goal was to hire as many people as we could at the Wuskwatim hydro project, but unfortunately, because of the grade levels, we weren't able to get them trained so they could work at the Wuskwatim project, because a lot of them needed training, upgrading especially. That tells you there is a tremendous need to educate our people so they can get their basic grade 12.
Even the people who graduate from our school system—they have their grade 12 level and they graduate—at the end of the day are still only equivalent to about grade 8. That tells you about the system itself.
When we look at the grand scheme of things, when you look at educating yourself, is there hope for our people? They don't see a light at the end of the tunnel for them. Maybe that is why they don't want to do anything, because there is nothing for them to do anyway. There are no jobs. There is no industry for our people in our community.
We are trying very hard to correct that problem, but we need some opportunities. We need hope. We need to be economically independent, and that's why we are involved with so many economic development projects, so there can be hope for our people, and so they can be inspired to go to school and get that training.
Education is key, as you know, and this has been echoed everywhere in this country, but at the end of the day there is no hope. There are no jobs for people. Maybe they will be stuck, not being trained or educated, but it is so fundamental.
As I said, we need proper facilities where our people can go to school, where they can get trained. Part of the access to capital is that there have to be more training dollars available too, more economic development dollars [Inaudible—Editor] that need to be available.
We get about $200,000 for economic development in our community, but that is not enough. People want to start up their own businesses, but unfortunately there is not enough money for that, even for our people in the community to start up their own small businesses. We have to rely on Community Futures North Central Development to help our people, but we need more money for economic development because the status quo is not working. Providing more money for SA, the standard approach to aboriginal economic development, is not working. We need to change that attitude. We need to create training dollars, more economic development dollars for our community.
Right now, we are working in Quebec only, but our company is structured in such a way that we will eventually be able to provide services outside the borders of Quebec, across Canada. This is a pilot project, but it has still helped raise $25 million in capital so far. The $25 million was invested in loans.
There is one noteworthy fact of interest. In all the loans that we have made, there are no arrears and we have never experienced any losses on these loans. There is a reason for that. Our management team is competent. We know the aboriginal market well and we are able to accurately assess risks, which helps us to properly manage the investments we receive and make loans in the communities.
I would say that it has been a success so far. The obstacle is that we are not able to find the capital. As I was saying just now, we could have $50 million today. Some investors have expressed an interest but only if the bonds match their investment requirements, whether for pension funds or insurance companies. Actually, our clients even include an insurance company and a pension fund.
All these major fund managers have investment policies and they cannot just buy any kind of product. Mr. Valcourt, Minister of Aboriginal Affairs and Northern Development, is well aware of the project with McConnell. The idea is to demonstrate that it works. At the end of the day, we must have the federal government working with us to guarantee the bonds that investors are willing to buy, instead of guaranteeing the loans. If we go by what we have achieved so far, that guarantee should not cost very much because we have not lost any loans in 10 years. No loans are in arrears. If the government had taken action in 2005, it would not have cost anything today. Government involvement would ensure that the model we have implemented could experience tremendous growth because capital is available. That is truly the key to success.
Ms. Whiteduck, whom I know very well, appeared before this committee. She probably told you about capital funds to attract capital. I have just recently participated in a roundtable discussion with investors because NACCA wants to set up a mechanism to attract $25 million in short-term capital to serve the aboriginal finance companies that need it.
We recently had a meeting in Toronto, with a table of investors. They said loud and clear that they wanted products to invest in, but the products had to fit in with their investment policies. It’s not terribly complicated: they buy AAA or BBB bonds, whichever, or bonds guaranteed by the federal or provincial government, or even by a municipality.
We cannot get around it. If we want to develop aboriginal communities, we need a huge amount of capital. This capital is available and it is in the hands of large investors, who want products offered to them that match their investment policies. We have been working on this for 10 years. Mr. Valcourt and the Department of Aboriginal Affairs and Northern Development are well aware of the project. Right now, the key to success is in the hands of the federal government.